Nuking rights of citizens

Posted on August 24, 2010 by Chellaney

It’s no-risk, all-profit business for four firms

Brahma Chellaney

The Economic Times, August 24, 2010

It is a reflection of the murky politics in the country that the government was able to cut a deal with the main opposition party on the nuclear-accident liability bill, ignoring concerns that the legislation would weaken nuclear safety and deprive potential Indian victims of accidents the very rights American citizens have.

This is not the first time that unscrupulous politics has come to the aid of Prime Minister Manmohan Singh’s obsessive focus on the nuclear deal with the US. In July 2008, his government survived the “cash-for-votes” scandal over the nuclear deal with the help of the Samajwadi Party.

Today, thanks to the shadowy deal with the morally and intellectually bankrupt BJP, the political debate on the accident liability bill has boiled down to a secondary issue — the “right of recourse” of the state operator in India after an accident — while the main issue has been allowed to go by default. The primary issue is whether it is sensible for a poor country like India, where the “operator” of nuclear-power plants will remain the Indian state, to assume all liability on behalf of foreign reactor vendors.

What India has set out to do is unparalleled: Without inviting global bids or having first negotiated the price and terms of reactor supply, the government has earmarked a nuclear park exclusively for each of the four foreign vendors, GE, Westinghouse, Areva and Atomstroyexport. It is acquiring land on their behalf at these designated parks, where each vendor is to erect multiple reactors. The government, however, will run the reactors through its state operator, subsidizing the high-priced electricity generated.

Now, through the proposed accident-liability law, the suppliers also are being indemnified, with all liability (financial and legal) being channelled to the Indian state. In effect, India is offering no-risk, all-profit business opportunities to the four vendors to build 28 reactors worth some $76 billion.

Given the high liability capacity being assumed — which could entail an average annual premium of nearly $1 million to be paid by the Indian taxpayer for each twin-reactor, foreign-built nuclear plant — foreign insurers are to be invited in. In case India in the future allows private players to also operate nuclear plants, the government has proposed an amendment to its own liability bill for the Indian republic to “assume full liability for a nuclear installation not operated by it.”

Yet few questions are being asked as to why the government is in an unseemly rush to pass such legislation and join the Convention on Supplementary Compensation, which hasn’t even come into force.

With the fundamental issues having been eclipsed from the debate, the focus has fallen on the right to recourse in the operator’s fiduciary liability policy. The government’s repeated attempts to dilute the right-to-recourse provisions against suppliers have exposed a disturbing dimension of the relationship between the executive branch and Parliament. First, a key word, “and”, was mysteriously added to the parliamentary standing committee’s text to water down those provisions.

When a furor greeted that surreptitious insertion, the government simply decided to supplant the committee’s agreed text with a new formulation that sets the right-to-recourse bar so high (“the nuclear incident has resulted as a consequence of an act of supplier or his employees, done with the intent to cause nuclear damage…”) as to render that right infructuous. All this raises troubling questions about the executive branch’s persistent moves to nullify a parliamentary committee’s work.

Broadly, the nuclear deal, which was pushed through without building “the broadest possible national consensus” that the PM had promised, has come to symbolize the decline of Indian politics, with self-aggrandizement replacing principles as the guiding philosophy for parties and national interests taking a back seat.

A win-win situation for foreign reactor vendors

Posted on August 19, 2010 by Chellaney

Nuclear Deal: Elusive Benefits, Tangible Costs

Brahma Chellaney

The Hindu newspaper, August 19, 2010

With accident-liability protection constituting another layer of state subsidy to foreign reactor vendors, the spectre of dozens of Enrons in the nuclear-energy sector is real.

The controversial Indo-U.S. nuclear deal was pushed through without building “the broadest possible national consensus” that the prime minister had promised. Certain give-and-take is inevitable in any deal. But this deal has picked up such onerous conditions that it now threatens to cast a perpetual political albatross around India’s neck. To implement the deal, the government is now seeking to burden the Indian taxpayer on multiple counts — from state subsidy in the form of liability protection and acquisition of land on behalf of foreign vendors to guaranteeing subsidised price of electricity from the high-cost foreign reactors to be imported. The result is likely to saddle India with dozens of Enrons in the nuclear-energy sector.

The deal’s energy benefits, in fact, are years away and will come with heavy economic costs. One reminder of the costs is the proposed nuclear-accident liability legislation. The revised bill that has emerged from the parliamentary standing committee increases, not lessens, the load on the taxpayer. The bill actually seeks to enshrine a new principle in international law: Profits are private, accident-related liabilities are all public.

While U.S. law permits “economic channelling,” but not “legal channelling,” of liability, thereby allowing criminal proceedings and other lawsuits against any party in courts, the revised Indian bill channels all financial and legal liability to the Indian state operator, effectively indemnifying foreign reactor vendors. Nuclear safety can hardly be enhanced by freeing foreign suppliers upfront from responsibility for accidents caused by design flaws, pinning liability singly on the state operator, and vesting the right of recourse only with the operator by shutting out victims of accident.

Nuclear parks

A bigger indicator of the energy-related costs, however, has completely escaped public attention. The government has earmarked a nuclear park exclusively for each of the four favoured foreign vendors. GE-Hitachi is to build six reactors at Kovvada (Andhra Pradesh), Westinghouse another six at Mithi Virdi (Gujarat), Areva a further six at Jaitapur (Maharashtra), and Russia’s Atomstroyexport six more at Kudankulam (Tamil Nadu) and an additional four later at Hirapur (West Bengal).

The reservation of a nuclear park for each foreign vendor even before the terms of a reactor contract have been negotiated is anti-competitive and unparalleled. To add to the pampering, India is also acquiring land on behalf of these firms.

Despite an inherently anti-market process, the government contends the contracts will be based on competitive pricing. But by reserving a park solely for each foreign vendor, it has undercut its own bargaining leverage. Just like the arms deals of recent years, the reactor contracts are all set to be signed without open bidding. Indeed, since the deal was unveiled in 2005, India has signed billions of dollars worth of arms contracts with America on a government-to-government basis, although the U.S. has no public sector.

Worse yet, foreign firms are being freed from the task of producing electricity at marketable rates. The reactors will be run by the state operator, with the Indian taxpayer subsidising the high-priced electricity generated. It may take nearly a decade before the first foreign reactor under the nuclear deal comes on line, if one goes by Areva’s record in Finland and Atomstroyexport’s at Kundankulam, where completion of a twin-reactor station is years behind schedule.

Technology controls

Yet another jarring aspect is that despite the deal being in force internationally, India continues to battle major technology sanctions. The deal has not lifted all technology controls even in the civilian nuclear field: In late June, the G-8 countries renewed their ban on sale of civilian enrichment and reprocessing (ENR) technology and equipment, even under international safeguards, to a non-NPT state like India. The Indian foreign secretary has described as “anachronistic” the continuing U.S. export controls against India that extend beyond the nuclear realm to cover advanced technologies and target civilian entities like ISRO. The PM, however, had triumphantly announced in 2008 that the deal “marks the end … of the technology-denial regime against India.”

The idea to build energy “security” by importing foreign fuel-dependent power reactors is nothing but a money-spending boondoggle likely to leave India insecure and buffeted by outside pressures. That spectre has been underscored by the four big “No”s for India embedded in the final deal: No binding fuel-supply guarantee to avert a Tarapur-style fuel cut-off; no irrevocable reprocessing consent; no right to withdraw from its obligations; and no right to conduct a nuclear test ever again.

The government has shied away from discussing even the economics of producing electricity from foreign reactors. India’s heavily-subsidised indigenous nuclear-energy industry is supplying electricity at between 2.70 and 2.90 rupees per kilowatt hour from the reactors built since the 1990s. That price is far higher than the cost of electricity from coal-fired plants. But electricity from foreign-built nuclear reactors will be even dearer. That, in effect, will increase the burden of subsidies on the Indian taxpayer, even as the reactor imports lock India into an external-fuel dependency.

The revised accident-liability bill does well to double the permissible time period for filing accident-related claims against the state operator. Increasing the compensation fund is also welcome, although there is no need realistically for minimum or maximum cap on liability when the Indian state is making itself wholly responsible for damages from an accident. But most other changes that have emerged from the standing committee’s deliberations or from the government’s disingenuous deal-making with the BJP do not address the fundamental concerns, which centre on relieving foreign vendors of direct liability for any accident and abridging the legal rights of victims.

Indemnifying foreign suppliers helps to significantly lower their costs and risks of doing business in India. But in extending such protection, the bill aims to overturn the doctrine of “absolute liability” laid down by the Supreme Court that prevents “enterprises” (including the operator, supplier, builder and owner) from wriggling out of their liability by claiming exemptions, such as alleged sabotage. The Supreme Court held after the Bhopal gas disaster that, “The enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-à-vis the tortious principle of strict liability.” By that standard, foreign reactor vendors would be fully liable for any wilful act or gross negligence that causes a nuclear accident.

The bill, however, casts all liability on the state operator and the federal government. The liability bill thus is a major liability for the Indian taxpayer.

A way out

The sensible course of action in nuclear energy would be for the government to let foreign vendors acquire land on their own at designated sites, build and operate reactors, and sell electricity to distribution companies without the Indian taxpayer in any way being burdened. If foreign firms produce nuclear energy at competitive prices, the benefits for India will be real. Even the cap on accident liability can be arranged by emulating the U.S. example so that the Indian taxpayer is the insurer of last resort, not of first resort. For each major radioactive release, America’s Price-Anderson liability system provides more than $10 billion in total potential compensation through a complex formula that includes insurance coverage carried by the reactor that suffered the accident, “retrospective premiums” from each of the covered reactors in operation in the U.S., and a five per cent surcharge. The liability burden thus falls on the private sector.

The Indian government, however, has no intention to create an open, competitive field because that would unmask and obstruct the generous state subsidies it is offering for nuclear-generated power. It thus told Parliament categorically on August 12 that it “does not intend to change the related provision of the Atomic Energy Act, 1962, for private participation” in nuclear energy.

Creating an artificial market with no-strings subsidies and electricity supply at state-supported rates is no prudent way to meet energy needs. The proposed arrangements actually seek to create a win-win situation for foreign vendors by ensuring there is no downside to their business. By rigging commercial terms in favour of select foreign suppliers, the arrangements, in effect, promote unfair business practices and cartelisation.

( Brahma Chellaney is the author, among others, of Nuclear Proliferation: The U.S.-India Conflict.)

The U.S.-India nuclear deal

Posted on August 15, 2010 by Chellaney

The wages of the nuclear deal

Brahma Chellaney

Mint, August 16, 2010

http://www.livemint.com/2010/08/15215312/The-wages-of-the-nuclear-deal.html

The quiet signing of the reprocessing agreement on 30 July has completed the last remaining bilateral element of the nuclear deal with the U.S. The multilateral elements are not only complete, but also being implemented. For example, India already has brought 16 of its nuclear facilities under permanent international inspection — a number scheduled to progressively go up to cover two-thirds of all Indian nuclear installations within four years. In addition, India is set to shut down by this year-end its main military-production workhorse, the Cirus reactor — the biggest cumulative contributor of weapons-grade plutonium to the country’s stockpile.

Yet, despite the deal being in force, India continues to battle major technology controls. China has greater access than India does to U.S. high technology, and this is unlikely to change after the ongoing Obama administration review of American export controls. Because the review is being driven by the barely disguised business goal to increase U.S. share of the Chinese market so as to reduce the yawning trade deficit, the China-India access gap can only widen in Beijing’s favour.

What tangible benefits, strategic or otherwise, has the deal yielded for India? Let’s face it: The Americans were more honest than the Indians about the deal. The final deal has turned out to be in line with what the U.S. Congress mandated, not what the Indian Parliament had repeatedly been assured by Prime Minister Manmohan Singh.

In fact, the deal conforms fully to the provisions of the 2006 Hyde Act. The congressional ratification legislation — the 2008 Nuclear Cooperation Approval and Non-Proliferation Enhancement Act, or NCANEA — actually tightened some of the Hyde Act provisions. The Indian side had publicly claimed that the Hyde Act would not determine the final deal, with some in authority even seeking to creatively differentiate between “operative” and “non-binding” parts of that Act. It had further been claimed that the 123 Agreement, once ratified, would become the “last expression of the sovereign will” and override all other laws including national laws.

These too-clever-by-half arguments have fallen flat on their face. Nothing can be more embarrassing to the Indian side than the fact that the bilateral accords it negotiated and signed — the 123 Agreement and the reprocessing pact — match up to U.S. congressional stipulations.

Worse still, the accords have been made subservient to American law. Take the 123 Agreement, which neither contains the international-law principle (found in the U.S.-China accord) that neither party will invoke its internal law as justification for a failure to honour the accord, nor provides (unlike the U.S.-Japan or U.S.-South Korea accord) for an arbitral tribunal to settle any dispute. As the NCANEA makes explicit, “Nothing in the [123] Agreement shall be construed to supersede the legal requirements of the Henry J. Hyde Act.”

As a result, the final deal ends up giving America specific rights — enforceable through the pain of unilateral suspension or termination of cooperation — while saddling India with obligations. The NCANEA actually records that the promise of uninterrupted fuel supply is a “political,” not legal, commitment. It cannot be anything else because the 123 Agreement itself confers an open-ended right on the U.S. to suspend fuel supplies straight away while issuing a one-year termination notice. In fact, as a corollary to that right, the U.S. has retained the prerogative in the reprocessing accord to unilaterally suspend its reprocessing consent to India.

What stands out about the final deal are the four “No”s for India: No binding fuel-supply guarantee to avert a Tarapur-style fuel cut-off; no irrevocable reprocessing consent; no right to withdraw from its obligations; and no right to conduct a nuclear test ever again. The no-test obligation constitutes the first instance in the nuclear age where one nuclear-weapons power has used a civilian cooperation deal to impose such a prohibition on another nuclear-weapons state. The Cirus’s impending dismantlement is another weapons-related obligation thrust on India.

No country in history has struggled longer to build a minimal deterrent or paid heavier international costs for its nuclear programme than India. Despite Asia’s oldest nuclear programme, India now has the world’s smallest nuclear arsenal — smaller than even Pakistan’s. More significant is that India still does not have a single Beijing-reachable nuclear missile in its inventory or production line. It is against that background that the nuclear deal marks a turning point.

The lasting legacy of the deal, in which the Indian government invested considerable time and diplomatic resources, will be to ensure that India stays enmeshed in its struggle to build regionally confined nuclear-weapons capability while becoming more reliant than ever on conventional arms imports to meet its basic defence needs. If ever there was hope of India becoming a full-fledged nuclear-weapons state like China, that prospect has passed.

A closer relationship with the U.S. is in India’s own interest. But it could have been built without a deal that carries serious, long-term costs. Indeed, such are the wages of the deal that India has refrained from speaking up on regional-security issues that directly impinge on its interests, including the continuing transfer of offensive U.S. weapon systems to Pakistan, now the largest recipient of American economic and military aid in the world. Islamabad, in fact, has managed to cut its own deal to buy two China-origin reactors without the burden of conditions cast on India.

Brahma Chellaney is professor of strategic studies at the Centre for Policy Research in New Delhi

Comments are welcome at theirview@livemint.com

Lift the wraps on the Himalayan border situation

Posted on August 15, 2010 by Chellaney

Let facts speak for themselves on the India-China frontier

Brahma Chellaney

The Sunday Guardian, August 15, 2010

For almost 11 months now, the Indian government has put a lid on the Himalayan border situation with China. Ever since several senior government figures last September spoke out against the manner the media was covering Chinese border incursions, sources of information have dried up and newspapers and television networks have carried little news. It is not that the Chinese cross-border forays have ended or even abated. It is just that Indian media organizations have little information to report, even though the incidence of Chinese incursions remains high.

Beijing can only be pleased with the way New Delhi has managed to gag its own media over the border incidents. The unwitting message that sends is that when the world’s biggest autocracy builds up pressure, the world’s largest democracy is willing to tame its own media.

Just as China has sought to pass off military incursions into Bhutan as instances of Chinese troops “losing their way,” soldiers of its People’s Liberation Army “lost their way” into Indian territory 270 times in 2008 alone — the last full year for which official figures are available. In addition, there were 2,285 instances of “aggressive border patrolling” by the PLA in 2008. Such a pattern of aggressive patrolling and intrusions has persisted to this day.

The plain fact is that the continuing border tensions reflect a growing strategic dissonance between China and India, which represent competing political and social models of development. Tibet has emerged at the centre of escalating Himalayan tensions. China has resurrected its long-dormant claim to Arunachal Pradesh — almost three times as large as Taiwan — and stepped up military pressure along the 4,057-kilometre frontier with India.

As the resistance to its rule in Tibet has grown, Beijing has sought to present Tibet as a core issue to its sovereignty. Tibet now holds as much importance in Chinese policy as Taiwan. But in spotlighting the Arunachal issue, Beijing seems to be drawing another analogy, even if unwittingly: Arunachal is the new Taiwan that must be “reunified” with the Chinese state.

Tibet, however, has always been the core issue in Sino-Indian relations. After all, China became India’s neighbour not owing to geography but guns — by annexing buffer Tibet in 1951. Today, Beijing is ever ready to whip up diplomatic spats with Western nations that extend hospitality to the Dalai Lama. But India remains the base of the Tibetan leader and his government-in-exile.

The key instigation in the more-muscular Chinese stance towards India clearly has come from the U.S.-Indian strategic tie-up, unveiled first in 2005. As President George W. Bush declared in his valedictory speech, “We opened a new historic and strategic partnership with India”.

Since then, the official Chinese media has started regurgitating the coarse anti-India rhetoric of the Mao Zedong era, with commentators warning New Delhi not to forget the lesson of 1962, when China humiliated India in a 32-day, two-front war. The Chinese Communist Party’s mouthpiece, the People’s Daily, earlier charged India with pursuing a foreign policy of “befriending the far and attacking the near,” while a commentary by the China Institute of International Strategic Studies — a PLA think-tank — cautioned India “not to requite kindness with ingratitude” and not to “misjudge the situation as it did in 1962”.

Against that background, India’s interests will be better served by letting the facts on the border situation with China speak for themselves.

In recent years, China has opened pressure points against India across the Himalayas, with border incidents occurring in all the four sectors. Chinese forces are intruding even into Utttarakhand (although the line of control in this middle sector was clarified in 2001 through an exchange of maps) and into Sikkim (whose 206-kilometer border with Tibet is not in dispute and indeed is recognized by Beijing). Yet, Indian officials have said the incursions are the result of differing perceptions about the line of truth. That may be so about Arunachal Pradesh and Ladakh, but can that be true about Sikkim and Uttarakhand? It speaks for itself that Beijing hasn’t offered this lame excuse.

Even in the pre-1962 period, India sought to play down China’s aggressive moves along the border. The result was “the stab in the back” in 1962, as Jawaharlal Nehru called it.

In fact, there are important parallels between the situation pre-1962 and the situation now. Border talks are regressing, Chinese claims on Indian territories are becoming publicly assertive, Chinese cross-border incursions are rising, and India’s China policy is becoming feckless.

Indeed, what stands out in the history of Sino-Indian disputes is that India has always been on the defensive against a country that first moved its frontiers hundreds of miles south by annexing Tibet, then furtively nibbled at Indian territories before waging open war, and now lays claims to additional Indian territories. By contrast, on neuralgic subjects like Tibet, Beijing’s public language still matches the crudeness and callousness with which it sought in 1962, in Premier Zhou Enlai’s words, to “teach India a lesson.”

The irony is that by laying claims to additional Indian territories on the basis of their purported ties to Tibet, China blatantly plays the Tibet card against India, going to the extent of citing the birth in Tawang of one of the earlier Dalai Lamas, a politico-religious institution it has systematically sought to destroy. Yet India remains coy to play the Tibet card against China.

The net result of failing to use Tibet as a bargaining chip has been that India first lost Aksai Chin, then more territory in 1962 and now is seeking to fend off Chinese claims to Arunachal Pradesh.

Beijing openly covets Arunachal Pradesh as a cultural extension to Tibet — a classic attempt at incremental annexation. Just because the 6th Dalai Lama was born in the 17th century in Arunachal’s Tawang district, Beijing claims that Arunachal belongs to Tibet and thus is part of China. By that argument, it can also lay claim to Mongolia as the 4th Dalai Lama was born there in 1589. The traditional ecclesiastical links between Mongolia and Tibet indeed have been closer than those between Arunachal and Tibet. What makes China’s claim more untenable is that, as part of its gerrymandering of Tibet, it has hived off the birthplaces of the 7th, 10th, 11th and present Dalai Lama — the 14th in line — from Tibet. Before seeking Arunachal, shouldn’t it be asked to first return the traditional Tibetan areas of Amdo and eastern Kham to Tibet?

NPT’s challenges now come from within its regime

Posted on August 9, 2010 by Chellaney

Saturday, Aug. 7, 2010 The Japan Times

The NPT’s uncertain future

By BRAHMA CHELLANEY

This year marks the 40th anniversary of the Nuclear Nonproliferation Treaty’s coming into force. Despite its central role in shaping the global nuclear order, the NPT’s future looks anything but promising.

The main challenges the NPT now faces come from within its regime, not from the nonparties. The nations outside the NPT fold that wanted to go nuclear have done so. And having acquired nuclear weapons, those states are in no position to join a treaty that essentially is rigidly structured and is thus not amendable.

It has been widely forgotten that the NPT originally was intended to prevent countries like Japan, West Germany and Italy from acquiring nuclear weapons. Japan, did not ratify the treaty until 1976 — eight years after the NPT was concluded, and six years after the pact took effect. Over the years, however, the challenges to the NPT have come from outside the list of its original targets.

It is remarkable that the NPT has survived for so long and that it was extended indefinitely in 1995. As a result of the 1995 action, the treaty — originally conceived as a 25-year bargain between nuclear-weapons states and nonnuclear-weapons states — has become permanent.

For the foreseeable future, nuclear weapons, with their unparalleled destructive capacity, are likely to remain at the center of international power and force capacity. Nuclear weapons, as the 2002 U.S. nuclear posture review stated, will continue to play a "critical role" because they possess "unique properties."

Some 95 percent of all nuclear weapons are in the arsenals of the United States and Russia. The U.S. has announced recently that it has 5,113 nuclear weapons in its arsenal, plus "several thousand" more waiting to be dismantled. Russia is believed to have a fairly similar number of nuclear weapons in deployment.

Although their arsenals have declined, both Russia and the U.S. still maintain "overkill" capabilities — that is, either can destroy the entire world several times over. There can be no justification for maintaining such large arsenals today, and the reductions proposed by the new Strategic Arms Reduction Treaty (START) between the U.S. and Russia will not change the overkill capacities of the two sides.

The latest U.S. Nuclear Posture Review (NPR) incorporates a welcome shift by proclaiming that the U.S. will not use nuclear weapons against a nonnuclear-weapons state or in response to a nonnuclear attack. Yet that assurance is hedged with caveats — the nonnuclear-weapons states have to be fully "in compliance" with their nonproliferation obligations; and given the catastrophic potential of biological weapons, the U.S. reserves the right to respond with nukes against a biological attack.

It would have been better had the posture review made clear — without any qualification — that the sole purpose of nuclear weapons is to deter a nuclear attack. Instead, the NPR declares such a sole purpose as a long-term goal. With the burden of the Nobel Peace Prize weighing heavily on U.S. President Barack Obama’s mind, the caveat-ridden NPR comes across as being more posture than review.

Given the fact that every nuclear- weapons state, by definition, is a proliferator, the varying standards still being applied on proliferation underscore the nonproliferation challenges. Geopolitical interests, rather than objective criteria, usually determine a response to any proliferation problem. Also, who is a legitimate nuclear-weapons state or who is not has remained a subject of controversy. The NPT recognizes as nuclear powers only those countries that tested a nuclear device before 1967. But it is hardly a good advertisement for the NPT regime that some nuclear-weapons states remain outside its fold.

Actually, the real "success" of the NPT has been in reinforcing the system of extended deterrence by giving countries such as those in NATO and others like Japan, Australia and South Korea little choice other than to continue to rely on the U.S. for nuclear-umbrella protection. Minus the NPT, these countries would have been the most-likely candidates to go nuclear because they also happen to be the most-capable states technologically. So, the effect of the NPT has been to either strengthen extended deterrence or to drive nuclear programs underground, as was symbolized by North Korea.

A few technologically capable countries, like Sweden and Switzerland, of course, voluntarily relinquished their nuclear-weapons option even while staying out of any alliance system. Their decision was based on a careful judgment that their security would be better protected without nuclearization.

Today, a key question that arises is whether any of the countries ensconced under the U.S. nuclear umbrella would be willing to forgo the benefits of extended deterrence in order to help lower the utility of nuclear weapons and give a boost to the cause of nuclear disarmament.

Today, the world has a treaty (although not in force) that bans all nuclear testing but no treaty to outlaw the use of nuclear weapons. In other words, those that are party to the Comprehensive Test Ban Treaty are prohibited from testing a nuclear weapon at home but are legally unencumbered to test the weapon by dropping it over some other state. That anomaly must be removed.

Brahma Chellaney is the author of the 2010 international best-seller, "Asian Juggernaut" (HarperCollins).

The Japan Times: Saturday, Aug. 7, 2010

China’s laogai system of forced prison labor follows its international investments

Posted on July 29, 2010 by Chellaney

China’s newest export: convicts

The use of convict labourers on overseas projects is damaging China’s international reputation

- Brahma Chellaney
- guardian.co.uk, Thursday 29 July 2010 07.59 BST
- Article history

China has devised a novel strategy to relieve pressure on its overcrowded prisons: employ convicts as labourers on overseas projects in the developing world. The practice has exposed another facet of China’s egregious human rights record which, when it comes to the overseas operations of Chinese companies, includes the government’s failure to enforce its own regulations.

China executes three times as many people every year as the rest of the world combined. Amnesty International has estimated that, in 2007, China secretly executed on average "around 22 prisoners every day".

In addition to being the world’s leading executioner, China has one of its largest prison populations. The 2009 world prison population listcompiled by the International Centre for Prison Studies at King’s College London, put the total number of inmates in Chinese jails at 1.57 million – larger than the population of Estonia, Guinea-Bissau, Mauritius, Swaziland, Trinidad & Tobago, Fiji or Qatar.

The forced dispatch of prisoners to work on overseas infrastructure projects raises new issues regarding China’s human rights record. It also adds a new element – the dumping of convicts – to its trade and investment policy, which has been much criticised for dumping goods.

Thousands of Chinese convicts, for example, have been pressed into service on projects undertaken by state-run Chinese companies in Sri Lanka, a strategically important country for China as it seeks to enhance its regional position in the Indian Ocean. After providing Sri Lanka’s government with offensive weapon systems that helped end the country’s decades-long civil war, China has been rewarded with port-building, railroad, and other infrastructure projects.

Chinese convicts also have been dispatched to the Maldives, where the Chinese government is building 4,000 houses on several different islands as a government-to-government "gift" to win influence. So far, however, China has failed to persuade the country’s president to lease it one of the 700 uninhabited Maldivian islands for use as a small base for the Chinese navy.

Chinese companies’ operating practice for overseas projects, including in Africa, is to keep the number of local workers to a bare minimum and to bring in much of the workforce from China, some of which comprises convicts "freed" on parole for project-related overseas work. Convict labourers, like the rest of the Chinese workforce on such projects, are housed near the project site. That way, if any convict worker escaped, he would be easy to find in an alien setting.

In theory, such practices run counter to regulations promulgated by the Chinese commerce ministry in August 2006, in response to a backlash against Chinese businesses in Zambia following the death of 51 Zambian workers in an explosion at a Chinese-owned copper mine. These regulations called for "localisation," including hiring local workers, respecting local customs, and adhering to safety norms. During an eight-nation 2007 African tour, Chinese President Hu Jintao made a point of meeting with Chinese businesses to stress the importance of corporate responsibility in their local dealings.

Moreover, in October 2006, the state council – China’s cabinet – issued nine directives ordering that Chinese overseas businesses, among other things, "pay attention to environmental protection", "support local community and people’s livelihood cause" and "preserve China’s good image and its good corporate reputation".

But Chinese regulations are sometimes promulgated simply to blunt external criticism, and thus are seldom enforced, except when a case attracts international attention. For example, in 2003 China enacted a law on environmental-impact assessments, which was followed in 2008 by "provisional measures" to permit public participation in such assessments. Yet Chinese leaders remain more zealous about promoting exports and economic growth than in protecting the country’s air and water.

Similarly, the state council’s 2006 nine directives to Chinese overseas companies have been subordinated to the drive for exports and growth, even when it imposes environmental and social costs on local communities abroad. Indeed, as part of the government’s "going global" policy, Chinese companies are offered major incentives and rewards for bagging overseas contracts and boosting exports.

The use of convict labourers adds a disturbing new dimension to this strategy. But even before convicts became part of China’s overseas development effort, some Chinese projects, especially dam-building schemes, were embroiled in disputes with local communities in Botswana, Burma, Pakistan, Ghana and Sudan. In fact, several small bombs exploded less than three months ago at the site of Burma’s Myitsone dam, whose construction by a Chinese company in insurgency-torn Kachin state is displacing thousands of subsistence farmers and fishermen by flooding a wide swath of land.

Chinese companies cannot get thousands of prisoners released on their own, let alone secure passports and exit permits for them. It is obvious that the practice of pressing convicts into service on overseas projects has been instituted at the instance of the Chinese government.

Until the Chinese government’s treatment of its own citizens and those of other countries is guided by respect for basic human rights and the rule of law, China is unlikely to command the respect that it seeks on the world stage.

• Copyright: Project Syndicate, 2010.

China’s policy: From dumping goods to dumping convicts

Posted on July 27, 2010 by Chellaney

Convicts for Export

Brahma Chellaney

http://bit.ly/9KyOc9

China has devised a novel strategy to relieve pressure on its overcrowded prisons: employ convicts as laborers on overseas projects in the developing world. The practice has exposed another facet of China’s egregious human-rights record, which, when it comes to the overseas operations of Chinese companies, includes the government’s failure to enforce its own regulations.

China executes three times as many people every year as the rest of the world combined. Amnesty International has estimated that, in 2007, China secretly executed on average “around 22 prisoners every day.”

In addition to being the world’s leading executioner, China has one of its largest prison populations. The 2009 “World Prison Population List” compiled by the International Center for Prison Studies at King’s College, London, put the total number of inmates in Chinese jails at 1.57 million – larger than the population of Estonia, Guinea-Bissau, Mauritius, Swaziland, Trinidad & Tobago, Fiji, or Qatar.

The forced dispatch of prisoners to work on overseas infrastructure projects raises new issues regarding China’s human-rights record. It also adds a new element — the dumping of convicts — to its trade and investment policy, which has been much criticized for dumping goods.

Chinese convicts also have been dispatched to the Maldives, where the Chinese government is building 4,000 houses on several different islands as a government-to-government “gift” to win influence. So far, however, China has failed to persuade the country’s president to lease it one of the 700 uninhabited Maldivian islands for use as a small base for the Chinese navy.

Chinese companies’ operating practice for overseas projects, including in Africa, is to keep the number of local workers to a bare minimum and to bring in much of the workforce from China, some of which comprises convicts “freed” on parole for project-related overseas work. Convict laborers, like the rest of the Chinese workforce on such projects, are housed near the project site. That way, if any convict worker escaped, he would be easy to find in an alien setting.

In theory, such practices run counter to regulations promulgated by the Chinese commerce ministry in August 2006, in response to a backlash against Chinese businesses in Zambia following the death of 51 Zambian workers in an explosion at a Chinese-owned copper mine. These regulations called for “local ization,” including hiring local workers, respecting local customs, and adhering to safety norms. During an eight-nation 2007 African tour, Chinese President Hu Jintao made a point of meeting with Chinese businesses to stress the importance of corporate responsibility in their local dealings.

Moreover, in October 2006, the State Council – China’s cabinet – issued nine directives ordering that Chinese overseas businesses, among other things, “pay attention to environmental protection,” “support local community and people’s livelihood cause,” and “preserve China’s good image and its good corporate reputation.”

But Chinese regulations are sometimes promulgated simply to blunt external criticism, and thus are seldom enforced, except when a case attracts international attention. For example, in 2003 China enacted a law on environmental-impact assessments, which was followed in 2008 by “provisional measures” to permit public participation in such assessments. Yet Chinese leaders remain more zealous about promoting exports and economic growth than in protecting the country’s air and water.

Similarly, the State Council’s 2006 nine directives to Chinese overseas companies have been subordinated to the drive for exports and growth, even when it imposes environmental and social costs on local communities abroad. Indeed, as part of the government’s “going global” policy, Chinese companies are offered major incentives and rewards for bagging overseas contracts and boosting exports.

The use of convict laborers adds a disturbing new dimension to this strategy. But even before convicts became part of China’s overseas development effort, some Chinese projects, especially dam-building schemes, were embroiled in disputes with local communities in Botswana, Burma, Pakistan, Ghana, and Sudan. In fact, several small bombs exploded less than three months ago at the site of Burma’s Myitsone Dam, whose construction by a Chinese company in insurgency-torn Kachin State is displacing thousands of subsistence farmers and fishermen by flooding a wide swath of land.

Failed talks at Islamabad

Posted on July 27, 2010 by Chellaney

Pakistan turns the tables on India

Brahma Chellaney

The Economic Times, July 20, 2010

In the blame-game over the botched Islamabad talks, it is India that comes out looking poorer. First, it resumed talks with Pakistan without having secured anything on the central issue of terrorism. Second, having made a diplomatic climbdown, India found itself being publicly put in the dock at the conclusion of the Islamabad talks.

The upshot is that a defensive India has had to respond to public accusations by a country whose state agencies continue to orchestrate acts of terror against Indian targets. This, however, is not the first time Pakistan has turned the tables on India.

Whether it was the Agra summit, or the Sharm el-Sheikh meeting, or the latest talks, it was a “hurt” India that came out defending itself. As long as India continues to cling to a diplomacy of hope and dreams, Pakistan, although a failing state, will continue to reap the diplomatic advantage.

Few states put as much faith in diplomacy alone as India does. Yet, in the absence of realistic, goal-oriented statecraft, the propensity to act in haste and repent at leisure runs deep in Indian foreign policy. Gushy expectations and wishful thinking have blighted Indian foreign policy and condemned the nation to relive history.

The previous BJP-led government took India on a roller-coaster ride, with an ever-shifting policy course on Pakistan. The present government is taking India on another jarring roller-coaster ride, having learned no lesson from the Sharm el-Sheikh blunder or its earlier action in designating Pakistan as a “fellow victim of terror” like India.

Pretty much everyone in the Indian delegation returned from Sharm el-Sheikh with egg on his face — from the prime minister, who claimed incredulously that he had done nothing to change anything, to the foreign secretary, who blamed “poor drafting” for causing the furor in India. Yet, no sooner had the uproar subsided than the PM sought to redo exactly what had angered the nation.

What prompted New Delhi this year to resume dialogue with Pakistan, first at the foreign-secretary level and then at the foreign-minister level? Mum is the word. Confusion and contradiction marks India’s current Pakistan policy. Just take one example.

On the one hand, New Delhi blames Pakistan‘s powerful Inter-Services Intelligence (ISI) agency for "controlling and coordinating" the Mumbai terror attacks “from the beginning to the end.” And on the other hand, it institutes “peace talks” with a Pakistani government whose India policy is controlled by the army and ISI. What does India seek to gain from such talks? Mum again is the word.

If New Delhi really has evidence to implicate the ISI in the Mumbai attacks, shouldn’t it, at a minimum, designate that rogue agency as a terrorist organization?

But that may be expecting too much from a government that thus far has not taken the smallest of small steps in response to the Mumbai attacks, not even as a mere token of India’s outrage over the role of Pakistani state actors in those strikes. Apart from sending Pakistan dossier after dossier pleading for action against the masterminds (and, in the process, fashioning a new counterterrorism tool — dossier-bombing), New Delhi has not lifted a finger.

In fact, the PM has been continuously shifting his Pakistan-related goalpost. After the Mumbai attacks, Singh first sought the dismantlement of Pakistan’s terror infrastructure against India. His benchmark then narrowed to bringing to justice the “perpetrators” (the actual executors, not the masterminds) of the Mumbai attacks. Next, Singh further watered down his stance by saying India was “willing to walk more than half the distance” if Pakistan undertook not actual action but merely offered “a renewed reaffirmation” to “bring the perpetrators of the Mumbai massacre to justice”. That is exactly what happened: In exchange for Pakistan’s mere reaffirmation of its anti-terror commitments, Singh resumed talks, only to suffer an embarrassing debacle in Islamabad.

But don’t expect the PM to give up on his make-peace-with-Pakistan line. In fact, after returning from Islamabad, the Indian foreign minister publicly blames the home secretary for ruining the talks. “Everyone who was privy to whatever was happening in government ought to have known that the right kind of atmosphere from India’s side should have been created for the talks to go on in a very normal manner, but unfortunately this episode happened,” he said.

Dangerous delusions characterize the Indian policy approach. One is that, “We cannot wish away the fact that Pakistan is our neighbor,” as the PM says. So, “a stable, peaceful and prosperous Pakistan” is in India’s “own interest.” But political maps are never carved in stone, as the breaking away of Eritrea, East Timor and others have shown. Didn’t Indira Gandhi change political geography in 1971? In fact, the most-profound global events in recent history have been the fragmentation of several states, including the Soviet Union and Yugoslavia. If Pakistan is on the path to self-destruct, why does India want “a stable, peaceful and prosperous Pakistan”?

Another delusion is that India and Pakistan are locked by a shared destiny. How can a plural, inclusive and democratic India share a common future with a theocratic, militarized and radicalized Pakistan?

Randall L. Schweller, in his study Deadly Imbalances, labels revisionist nations “wolves” and “jackals”, while status quo states are either “lambs” or “lions”. India certainly qualifies as a “lamb”, surrounded by “jackal” Pakistan and “wolf” China. The “lamb” status is in keeping with its intrinsic disposition and meek objectives. Although its borders have shrunk since independence, India is lamb-like content with the status quo. Only a “lamb” state will make unilateral concessions. Also, only a “lamb” will assume that others change their beliefs and policies as rapidly as it meanders to a new course.

Brahma Chellaney is Professor of Strategic Studies at the Centre for Policy Research in New Delhi.

ASEM process: Two continents seek one vision

Posted on July 21, 2010 by Chellaney

Don’t underestimate ASEM

By BRAHMA CHELLANEY

The Japan Times, July 21, 2010

One of the less-noticed initiatives in the world is the Asia-Europe Meeting (ASEM), designed to foster closer cooperation between the old economic giants of Europe and the new economic powers of Asia — the two diverse but culturally rich continents that together represent half of the world’s GDP and about 60 percent of the global population and international trade.

Heads of state or government from 46 Asian and European countries will gather in Brussels in early October for the eighth ASEM summit to discuss key international challenges and ways to strengthen political, economic and cultural ties between the two continents. They will include leaders from Russia, Australia and New Zealand, which are set to shortly join the ASEM initiative.

As a runup to the summit meeting, the ASEM Public Conference on Europe-Asia Inter-Regional Relations, held in Brussels from July 12 and 13, examined the regional institutional architectures in Asia and Europe, security concerns in both continents, global economic and financial challenges and prospects for building closer Asian-European collaborations.

ASEM has the potential to play an important role on the world stage. Indeed, Europe has developed an important stake in Asia’s continued economic growth and peace: Its trade with Asia totaled 750 billion euro in 2009. European foreign direct investment in Asia is estimated at 350 billion euro, with some 40 billion euro invested in 2008 alone.

In addition, according to analyst Dr. Fraser Cameron, the European Union, as an institution, expends 800 million euro on development assistance in Asia — a figure that rises to over 3 billion euro when bilateral development aid from the EU member-states in included.

At the last ASEM summit meeting in Beijing in 2008, discussions began on reforming international institutions, whose structure has remained static since the 1940s even though the world has changed fundamentally. In response to the growing Asian pressure, the World Bank agreed three months ago on a 3.13 percent shift in voting power to give emerging and developing nations greater influence.

Reaching a deal on such a change, however modest, became a test case in Asia-Europe relations because the European economies were reluctant to give up some of their voting shares, especially as the United States was intent on holding on to its veto power. The biggest beneficiary of this reform is China, whose voting power at the World Bank now ranks third behind the U.S and Japan.

Group of 20 leaders last month pledged to push for a similar agreement in the International Monetary Fund to transfer up to 5 percent of the voting power to emerging economic powers by the next G20 summit in Seoul in early November.

Some 14 years after its establishment, ASEM remains an ambitious initiative. It is difficult to lump Europe and Asia together, especially at a time when Asia has become the world’s largest creditor and the main economic locomotive and Europe’s financial crisis has turned its focus inward. Asia has done a much better job than Europe and the U.S. in coping with the international financial crisis. The EU entered the 21st century on a confident note after introducing the euro and then expanding to become a 27-nation institution. But in more recent years, discord over institutional changes and the impact of the financial crisis have stalled its momentum.

Still, Asia’s rise is often exaggerated, just as there tends to be an unnecessarily gloomy view about Europe, as if it were under irreversible decline.

Asia’s rise has been looked at from a single index: GDP growth. But the concept of development is not one-dimensional. It is broad-based and comprises multiple indexes, including low-income disparity, respect for human rights and the rule of law, robust civil society, social equity, public transparency and accountability, gender equality, environmental protection, and secularism.

When such broader benchmarks are considered, Europe emerges as an example for Asia to emulate. That is underlined by the UNDP’s annual Human Development Reports, which show disparities in Asia are growing, along with environmental degradation. Such trends hold ominous implications for intrastate stability in Asia.

As far as larger security is concerned, there is a clear overlap between European and Asian interests. That is best symbolized by the Afpak belt, with NATO spearheading the Afghan war, in which forces of a number of European countries are involved. It is also symbolized by the presence of European and Asian navies in the western rim of the Indian Ocean to combat ocean piracy, especially off the coast of Somalia.

With 21 EU member-states in NATO, the military involvement of European countries in the Afghan war shows how Asian security issues can impinge on European interests.

Both Europe and Asia actually face important security challenges. For Europe, defining the relationship with NATO, including the scope for closer cooperation, is important for further developing the EU’s Common Security and Defense Policy (CSDP), formerly known as the European Security and Defense Policy.

Compared to Europe, Asia’s security challenges are far more pressing. Asia has not only the world’s fastest-growing economies, but also the world’s fastest- rising military expenditures, the most dangerous hot spots and the fiercest resource competition, both for energy and for water.

Asia may be coming together economically, as reflected in the plethora of free trade agreements in the region. But it is not coming together politically. If anything, it is becoming more divided.

To compound matters, there is neither any security architecture in Asia nor a structural framework for regional security. The regional consultation mechanisms remain weak, even though Asia needs to cope with entrenched territorial disputes, sharpening competition over scarce resources, maritime-security threats, expanding national military capabilities, increasingly fervent nationalism and the rise of religious extremism. Differences persist over whether a security architecture should extend across Asia or just be confined to an ill-defined regional construct, East Asia. China favors the latter, and the U.S., Japan, India and several other Asian states the former.

For its part, Europe has made slow progress in strengthening its security architecture or giving concrete shape to the CSDP. But the Asian challenges raise an important question: Is Asia going to be an arena of old-style, balance-of-power politics and thus crimp its ability to shape the new global order? Or will growing cooperation and economic interdependence, as well as prospects of shared prosperity and stability, propel Asian states to act as "responsible stakeholders" in the international system and help reform global institutions?

Brahma Chellaney is professor of strategic studies at the privately funded Center for Policy Research in New Delhi.

The Japan Times: Wednesday, July 21, 2010

Needed: A new political order in the Hindu-Kush region

Posted on July 18, 2010 by Chellaney

Time has come to accept the de facto partition of Afghanistan

Brahma Chellaney

The Sunday Guardian, July 18, 2010

As the Afghanistan war approaches its 10th anniversary, it
is a reminder that this is the longest foreign war in American history. The
U.S. war effort is clearly faltering, to the extent that Afghan President Hamid
Karzai has started exploring the possibility of cutting his own deal with the
Taliban.

If defeat is beginning to stare the U.S. in the face, it is
largely because of President Barack Obama’s botched strategy. Obama has
designed his twin troop surges not to militarily rout the Afghan Taliban but to
strike a political deal with the enemy from a position of strength. But as CIA
director Leon Panetta admitted recently about the Taliban, “We have seen no
evidence that they are truly interested in reconciliation.”

Why would the Taliban be interested in negotiating a deal
with the Americans when Obama publicly declared, just weeks after coming to
office, that he was interested in a military exit from Afghanistan? The Taliban
and their sponsors, the Pakistan military, simply want to wait out the Americans.

Unable to bring the Taliban to the negotiating table, the
Obama administration is searching for credible options to fend off defeat.
While the U.S. has no cost-free option, its least bad option, according to
Robert Blackwill, is to accept the de facto partition of Afghanistan.
Blackwill, who served as U.S. ambassador to India, deputy national security
advisor for strategic planning and presidential envoy to Iraq in the George W.
Bush administration, says in an article that de facto partition offers the only
alternative to strategic defeat. That option means that the U.S. will end
ground operations in Afghanistan but use air power and its special forces to
attack Taliban strongholds in Afghanistan’s Pashtun-dominated south and east
while ensuring that the non-Pashtun northern and western Afghan regions retain
their present de facto autonomy.

Blackwill has picked up the de facto partition idea from
M.J. Akbar, who has been advocating it for a while. This idea meshes with the
thesis this writer has been propounding that the way to contain the scourge of
international terrorism is to stop treating as sacrosanct the existing
political borders of Afghanistan and Pakistan. There is continuing reluctance
in the international policy discourse to face up to a central reality: The
political border between these two problem countries has now ceased to exist in
practice.

The so-called Durand Line, in any event, was an artificial,
British-colonial invention that left the large Pashtun community divided into
two. Set up in 1893 as the border between British-led India and Afghanistan,
the Durand Line had been despised and rejected by Afghanistan for long as a
colonial imposition.

Today, that line exists only in maps. On the ground, it has
little political, ethnic and economic relevance, even as the
Afghanistan-Pakistan region has become a magnet for the world’s jihadists. A de
facto Pashtunistan, long sought by Pashtuns, now exists on the ruins of an
ongoing Islamist militancy but without any political authority in charge.

The disappearance of the Af-Pak political border seems
irreversible. While the writ of the Pakistani state no longer extends to nearly
half of that country (much of Baluchistan, large parts of the North-West
Frontier Province and the whole of the Federally Administered Tribal Areas),
ever-larger swaths of Afghanistan are outside the control of the government in
Kabul. The Pakistani army has lost increasing ground to insurgents in the
western regions not because it is weaker than the armed extremists and
insurgents but because an ethnic, tribal and militant backlash has resulted in
the state withering away in the Pashtun and Baluch lands. Forced to cede
control, the jihadist-infiltrated Pakistani military and its infamous
Inter-Services Intelligence agency have chosen to support proxy militant
groups, in addition to the Taliban.

The international reluctance to come to terms with the new
reality is because of the fundamental, far-reaching issues such acceptance
would throw open. It is simpler to just keep up the pretense of wanting to
stabilize Pakistan and Afghanistan within their existing political frontiers.

Take U.S. policy. As if determined to hide from this
reality, Washington is now pursuing, at least outwardly, a military approach
toward Afghanistan through a troop “surge” and a political strategy toward
Pakistan centered on the tripling of non-military aid. The plain fact is that
the entire war effort has been focused on the wrong side of the Durand Line. A
forward-looking Af-Pak policy demands consistency in approach toward these two
interlinked countries and recognition of the 2,640-kilometer Durand Line’s
disappearance. The ethnic genie cannot be put back in the bottle.

To arrest further deterioration in the Afghan war, the U.S.
military needs to focus less on al-Qaeda — a badly splintered and weakened
organization whose leadership operates out of mountain caves — and more on an
increasingly resurgent Taliban that operates openly and has sanctuaries and a
command-and-control structure in Pakistan.

The Obama administration complains that a weak, corrupt
government in Kabul is driving Afghans into the Taliban’s clutches. So, it has
sought to do business directly with provincial governors and tribal leaders and
seek their help to set up local, Iraq-style militias to assist the U.S. forces.
Yet in Pakistan it is doing the opposite: propping up a shaky, inept central
government while pampering the military establishment that is working to
undermine the civilians in power. Despite the generous U.S. aid, the 2010
Failed States Index ranks Pakistan as the 10th most failed state on Earth.

Let’s be clear: Pakistan and Afghanistan, two artificially
created states with no roots in history that have searched endlessly for a
national identity, constitute the most dangerous region on earth. They have
emerged as the global epicenter of transnational terrorism and narcotics trade.
Additionally, Pakistan is where state-nurtured terrorism and state-reared
nuclear smuggling uniquely intersect.

Yet, as if the forces of terror can be boxed in, the U.S. is
now scaling back its objective to regionally contain rather than defeat
terrorism — a strategy that promises to keep the Af-Pak problem as a festering
threat to global security.

Given that this region has become ungovernable
and borderless, it seems pointless to treat the existing political frontiers of
Afghanistan and Pakistan as sacrosanct when the Af-Pak fusion term itself
implies the two are no longer separate entities. The time has come to start
debating what kind of a new political order in the Hindu-Kush region could
create stable, moderate, governable and ethnically more harmonious states.
Accepting the de facto partition of Afghanistan can serve as a first step in
that direction.